The healthcare provider Molina gave itself six months to replace a tangle of inherited telecommunications systems with a single one built on IP. Here's how it managed the feat.

Payoff and New Possiblities

Ultimately, the VOIP project played well within a broader corporate strategy of consolidating core systems to lower operating costs. Particularly in a company growing through acquisitions, and trying to improve the efficiency of each newly acquired health plan, targeting the "general and administrative" portion of the corporate financial statement is key, Poman says.

The VOIP project helped drive down costs in many ways. For starters, consolidating the multiple telecommunications contracts previously negotiated by separate plans shaved about 13 percent off the total, Click says. Molina says the project has now paid for itself with savings over and above the cost of implementing the VOIP system.

While giving a tour of the Long Beach data center some months ago, Poman and Santucci pointed out the amount of floor space they've recovered, with modern equipment that provides more functionality and fits in less than half the space that their old Private Branch Exchange system occupied.

Meanwhile, the flexibility afforded by VOIP technology is proving useful both for disaster recovery (including minor "disasters" like snowstorms and phone outages) and for routine operations. For example, the nurses manning Molina's nurse help line can now work from home, using a Cisco phone and a broadband Internet connection to tie into the corporate phone system. That in turn is making it easier for Molina to recruit nurses with specific skills, such as fluency in Spanish, because it minimizes the importance of geography.

Similarly, the information technology department is considering virtualizing its computer help desk by tapping personnel stationed in other offices to help field calls coming in to the main help desk in Long Beach.

Also, now that Molina has gained experience re-routing customer service calls between offices during events such as snow storms, it is starting to consider doing so on a more routine basis—simply to shift work between one office that is overloaded to another that is less busy. That would require more cross-training between staffs—so that New Mexico personnel really would know how to field calls from California customers, for example—but the technology is in place to make it happen.

David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.